Markets and economists are increasingly betting that the Federal Reserve will cut interest rates again at its October 29 meeting, and perhaps even more before the year’s end. If that happens, anyone holding cash in checking accounts, savings, money market funds, or CDs risks earning next to nothing, or worse, losing purchasing power if inflation erodes returns. Below, we’ll look at how likely those cuts really are and explore smart moves you can make now to protect your cash reserves.
A rate cut isn’t all good news: while most consumers and businesses welcome cheaper borrowing, many retirees and income-dependent savers will see interest income from fixed-rate investments shrink. Understanding both sides of the tradeoff will help you prepare before the Fed acts.
